What drives the market on August 21?

What drives the market on August 21?

Fundamentals

  • The market sentiment has switched to risk-on today as US-China relationships are getting better. The US dollar is dipping down, while riskier assets are rising.
  • Yesterday US unemployment claims surprisingly surged slightly above 1.1 million, while analysts forecasted only 930 000. It marked a slowdown in the recovery of the US labor market.
  • Stocks are edging higher. Nasdaq sets fresh highs almost every day. It’s mainly driven by tech stocks as Tesla and Apple reached all-time records.
  • Vaccine hopes also add some optimism to the market. Pfizer and BioNTech announced that the regulatory review of the Covid-19 vaccine is scheduled for October. It proved that the significant progress has already been made, and soon the vaccine will be ready for mass use.
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Technical tips

EUR/USD

 EUR/USD is climbing up. If it breaks out the key psychological mark at 1.1900, it may surge to the high of August 19 at 1.19500. Otherwise, if it falls below the yesterday low at 1.1830, it will open doors to the next support of 1.1800.

EURUSDH4.png

Gold

Gold is trading sideways. The move below the recent low of $1 925 will drive the price lower to $1 912.  On the flip side, if it jumps above the high of August 14 at $1 960, it will rally further to high levels of early August at $1 980.

XAUUSDH4.png

USD/JPY

The mixed data from Japan came out this morning. The core CPI was worse than expectations: 0.0%, while the forecast was 0.1%. At the same time, the manufacturing PMI was 46.6, which is slightly better than anticipated 45.0. The Japanese yen is driving lower. If it crosses the 23.6% Fibonacci level of 105.55, it may drop even further to the low of July 30 of 105.15. In the opposite scenario, if it surges above the 38.2% Fibonacci level of 105.85, it may jump to the 50% Fibo level at 106.10.

USDJPYH4.png

S&P 500

Finally, let’s have a look at S&P 500. It is trading just below the all-time high of 3 390. The current risk-on sentiment may push it higher to 3 400. On the flip side, if it breaks down the low of August 20, it may fall even deeper to the low of August 12 at 3 330.

S&P500H4.png

Pay attention to economic releases today. Starting from 10:15 MT time there will be French, German, European, British and US PMI reports. 

Check the economic calendar

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Similar

USD Holds the Line
USD Holds the Line

The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now. 

US Dollar Prepares for the Pump
US Dollar Prepares for the Pump

On the H4 timeframe, the US dollar index has formed a bullish falling wedge. At the beginning of the trading session, the price is testing the upper border of this wedge. Thus, in case of a higher-than-expected Core PCE Price Index m/m, the US dollar will skyrocket against other currencies. 

Uptrend in Gold Starts Now
Uptrend in Gold Starts Now

Happy Wednesday, traders! We went through the Internet and found the best news for you, take a look!

Latest news

Market Crash Incoming?
Market Crash Incoming?

This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.

What Currency Will Overperform?
What Currency Will Overperform?

S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.

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